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EU Holds Unannounced Emergency Talks With Greece Over Weekend To Draft Second Bailout As Two Year Greek Bonds Pass 26%

Tyler Durden's picture




 

Another weekend, another secret, and failed, meeting between the EU and Greece to find a bailout solution that simply does not exist. Reuters reports that while America was out camping, barbecuing and all around vacationing, the European Union was feverishly working on a second bailout package, holding another round of emergency talks with the Greek government, to prevent a June 29 default by Greece when money runs out. Alas, it is now too late: with austerity protests now a daily event, the political opposition has the upper hand and it seems that Greece's conservative opposition has demanded lower taxes as a condition for reaching a political consensus with the Socialist government on further austerity measures, a move which Brussels would not agree to, since unlike in America, cutting revenues does not lead to an reduction in the deficit, and anyone with a 2nd grader's education is aware of it. Punctuating that Europe's idealist unitary vision is about to be torn to shreds, even as the US and UK are out for the day, is the Greek 10-year Bund spread which rose by 20 basis points to 1,387 while two-year yields were up
58 bps to 26.23%.

More on the political barriers to a rescue package:

The tax cuts sought by conservative New Democracy leader Antonis Samaras could aggravate the revenue shortfall, but he argues they are essential to revive economic growth.

EU officials said a new 65 billion euro package could involve a mixture of collateralized loans from the EU and IMF, and additional revenue measures, with unprecedented intrusive external supervision of Greece's privatisation program. "It would require collateral for new loans and EU technical assistance -- EU involvement in the privatisation process," one senior EU official said, speaking on condition of anonymity.

Extra funding for Greece faces fierce political resistance from fiscal conservatives and nationalists in key north European creditor countries -- Germany, the Netherlands and Finland -- complicating EU governments' task.

More allegations of secret meetings, this time not from Spiegel but from Kathimerini:

Greek daily Kathimerini said finance ministers of the 17-nation single currency area may hold a special meeting next Monday on a new package. European Commission spokesman Amadeu Altafaj dismissed the report as "unfounded rumours, once again."

The next scheduled meeting of euro zone finance ministers is on June 20 in Luxembourg, having been pushed back a week from its original date. It will be followed three days later by a summit of EU leaders to assess the 18-month-long debt crisis.

And while a reprofiling, a SMILE, or however one wants to call the Greek bankruptcy is inevitable, the ECB continues to be staunchly against it, correctly pointing out that there is no such thing as a "controlled demolition."

ECB board member Lorenzo Bini Smaghi said in an interview published on Monday the idea that debt restructuring could be carried out in an orderly way was a "fairytale," saying it was the equivalent of the death penalty.

"If you look at financial markets, every time there is mention of a word like 'restructuring' or 'soft restructuring' they go crazy -- which proves that this could not happen in an orderly way, in this environment at least," Bini Smaghi told the Financial Times.

He also warned against a debt 'reprofiling', or voluntary extension of Greek bond maturities, saying it would be hard to get investors to agree to such a deal without the use of force.

Naturally, as reported yesterday, the best outcome to Europe, or rather Europe's bankers, would be for Greece to cede all sovereignty, and just become a vassal colony of Belgium:

"The Eurogroup is doing research for reprofiling -- what can you do on reprofiling? Is it possible without a credit event?" Dutch Finance Minister Jan Kees De Jager told reporters on Saturday in Cyprus. "It's an investigation, and we have to wait for the outcome of it.

EU officials contend that Greece could do much more to help itself by selling off a treasure trove of state assets.

ECB executive board member Juergen Stark told Welt am Sonntag newspaper that Athens could raise as much as 300 billion euros from privatising state property.

Greece currently aims to raise 50 billion euros from privatisations by 2015 to help stave off a fiscal meltdown, but the country lacks a proper land registry and ownership of many potentially lucrative assets is legally uncertain.

Athens is setting up a sovereign wealth fund to pool real estate assets and state stakes in companies such as telecom company OTE, Post Savings Bank and ports.

It is funny how everything will come to a head (enter IMF jokes) within a 24 hour span: the Greek IMF tranche is due June 29 (and as of right now we use the word "due" very loosely), while QE2 ends on June 30, which also happens to be the day the new IMF successor is expected to be chosen. Lots of distractions ahead: avoid the noise and focus on the signal.

And for all those to whom things are still unclear (even though Zero Hedge suggested the purchase of Greek, and all other sovereign, CDS back in January of 2009), here is a flowchart we presented in January of 2010, well before the "everybody could have seen this happening" stage, which explains everything that has transpired in (and with) Greece in the past 1.5 years. We are now in the "Insufficient Adjustment" stage. There are only two options as to what lies ahead (and only one open question: will the final E-Bay price for Santorini have the VAT included and can it be shipped via first overnight).

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/madoff/Barclays%20Greece%20Flow%20cahrt.jpg

 

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Mon, 05/30/2011 - 08:35 | 1322169 Mongo
Mongo's picture

Taxpayer ass pounded in 3... 2...

Mon, 05/30/2011 - 08:43 | 1322175 hugovanderbubble
hugovanderbubble's picture

Wont be taxpayers.

Neodrachma in Cyprus and Greece coming

 

Greece is completly out of the Euro(will be kicked sooner o later in 1-2-3 years), the problem then is for Credit Agricole who stores 33.000 Mn Euros in Loans will Greek Shippers and Bulkers firms....Just awesome...All Wet paper...

Devaluation-------> --------> In all Periphericals + Italy and Belgium ( CDS soaring next months)

 

Finally the system will be restored with Gold and Silver as main hard asset currency linked weighted average basket.

Mon, 05/30/2011 - 10:25 | 1322325 trav7777
trav7777's picture

eurozone in deflation due to default, which direction is the currency going?

Default in the sovereign regime leads to currency collapse, not the opposite.

Mon, 05/30/2011 - 08:47 | 1322174 Oh regional Indian
Oh regional Indian's picture

They gave us the alpha, they sure as hell will give us all the Omega too.

But again, greece is the side-show. It's Spain. It's Spain that is being Bulwarked, because it is not as bad as Greece.

When Portugal truely goes "Uncle", it shall rain in Spain.

Also, Dollar kaput date seems to be August 15th. Some big ECB move will happen that day too. Look for things/signs that point to that being some sort of culmination/tipping point.

ORI

http://aadivaahan.wordpress.com/2011/05/26/the-video-trailer/

Mon, 05/30/2011 - 09:03 | 1322207 Orly
Orly's picture

Okay, I'll bite...

Why 15 August?

:D

P.S.  I saw the video trailer.  It was very nice music.

I have often asked myself, too, "where do I fit?"  More commonly, I reach another question entirely:  do I fit at all?  Even amongst family and friends, there seems to be a distinct disconnect as everyone seems to be inside their own head and rolling toward their own agenda.  I would suppose that I am guilty of this, as well.

Thinking on how to correct this situation, I have been led to an idea of openness; of opening my mind and heart in its purest form to everyone and eveything around me.  I find it physically taxing and emotionally draining, though.  I suppose that I could get better at it with practice.

Any advice you have toward this idea would be appreciated.

:D

Mon, 05/30/2011 - 10:00 | 1322280 Oh regional Indian
Oh regional Indian's picture

;-) Thanks for playing Orly.

Because I saw a sign on the road as clear as day, to a sign watcher anyways. Plus, of course, 40th anniversary of the great August 15th 1971 Nixon window crunch on french fingers.

Look at the pattern repeat itself eh? Rhyme anyways, with DSK being clearly targeted for tarring and feathering, guilty or otherwise. It's the old Franco-Prussian war that never ended. Perhaps now we'll see Sarkozy's Gaddaffi connection being washed in public... pow-pow, France in dis-array....

US is of course a proxy state for the 4th you know what in this 4 numbered year.

Also interesting, the historical 40 year life of fiat currency.

And to your question, I ask why Orly? Why open your-self to a rather vampirish time, energetically speaking? Not in this time. Just dive in and find your authentic self. Then you just are who you are and it is never tiring to be you, you know what I mean? It is the pretense that is taxing, not so much that people drain you. Find Orly and then all questions end. I'm not quite there myself, but I've seen flashes.

I try to live as pretense free as possible, and while it is a tad isolating, worth it.

Glad you liked the muse-ic! :-)

ORI

Mon, 05/30/2011 - 10:39 | 1322350 Orly
Orly's picture

Okay, signs.  I am a firm believer; not as some mysticism but in the belief that once multiple waves are set into motion, their resonant frequency will eventually come to being "in tune."

In which calendar is this a fourth numbered year?  Please explain.

As far as the Franco-Prussian war that never ended, I can say that our debts to the French, from the American Revolution, have been paid up and they shouldn't rely on the US saving their asses this time.  In fact, there is such a disdain in this country currently for the French (has that been manufactured, or is it real?) that it wouldn't surprise me if the US were to take an active role in solving this European mess, only this time on the side of the Germans.

Remember that the German language lost by one vote in regard to being the national language of the United States.  French may have been considered but not by much.  Our language and ideals, it seems, are mostly aligned with those of the Germans, so it would behoove the French to take note and not rely on Uncle Sam coming to their rescue any time soon.

:D

Sorry for the off-topic, folks...

But, ORI, I have responsibilities to others and just "being me" would be difficult when I have so many roles to fill.  It seems the mother's place is to be "vampired" upon anyway.  I can see no way to avoid it completely.

I will look for these flashes myself, then try to remember the key to the puzzle I saw to get there.

Mon, 05/30/2011 - 11:11 | 1322421 Oh regional Indian
Oh regional Indian's picture

The bit about German as potential national language always surprises people. yes, I knew and that is what I'm hinting. US is 4th R. France and a lot of Africa is French. ooooh!

We shall see. By the way, 2011 = 2+1=1 = 4, like that. And don't let anyone tell you that the gregorian calendar is just some made up and oft changed system. For th epeople who know, it is spot on. It does tend to bias the outcomes too though. 

But on off topics, feel free to dive in via blog or e-mail. Lots to say on the self-hood. Try this for size:

http://aadivaahan.wordpress.com/2010/06/14/know-thy-self/

ORI

 

Mon, 05/30/2011 - 11:22 | 1322465 Orly
Orly's picture

Hmmm.

So we have US, UK und Deutschland as the new Axis powers, which will then pillage French Africa for minerals, rare or otherwise.

The Chinese have invested a lot of time in the "Public Relations" department on the continent but that is all they have: PR.  No jets, no bombs, no ships. While the Russians have enough oil and gas to sit this one out easily and watch as the pieces fall away from their once-vast empire.  At least Putin can say, "Hey, I got mine."

If that is the case (and you saw my post the other day in regard to your discovery of "palingensia," so you know it will be the Fourth Reich... #1315453 ), there is no one who can stop this juggernaut.  And taking the conspiracy a little further, perhaps Germany allowed the conceited French idea of a unified Europe, knowing it wouldn't work and also knowing that they hold all the cards in the game.  It is probably an original German saying to give someone enough rope to hang themselves.

Why wouldn't the Germans go along and sponsor "pan-Europeanism"?  It is what they have been after for two hundred years, isn't it?  In this way, they have the ability to subterfuge any Continental economy they choose and can easily win all of Europe without a single Dresdener being sent to the front.  Forget the Maginot Line; the French just let them right in the garden door at lunchtime.

Of course, all of this couldn't have been done without the complicity of the US cabal- the shadow government.

So tell me, comment dit-on, "Ooops!" en Francais?

Mon, 05/30/2011 - 11:48 | 1322518 Oh regional Indian
Oh regional Indian's picture

Merde?

ORI

Mon, 05/30/2011 - 12:07 | 1322577 pain_and_soros
pain_and_soros's picture

<Remember that the German language lost by one vote in regard to being the national language of the United States.>

Quite an exaggeration -

German as the official US language myth

An urban legend, sometimes called the Muhlenberg legend after Frederick Muhlenberg, states that English only narrowly defeated German as the U.S. official language. In reality, the proposal involved a requirement that government documents be translated into German.[4][5] The United States has no statutory official language; English has been used on a de facto basis, owing to its status as the country's predominant language.

http://en.wikipedia.org/wiki/German_in_the_United_States

Frederick Muhlenberg

Muhlenberg was a member of the Continental Congress in 1779 and 1780, and served in the Pennsylvania House of Representatives from 1780 to 1783. He was elected its speaker on November 3, 1780. He was a delegate to and president of the Pennsylvania state constitutional convention in 1787 called to ratify the Federal Constitution. He was the first signer of the Bill of Rights.

He served as a delegate to the First and to the three succeeding United States Congresses (March 4, 1789–March 4, 1797). Muhlenberg was the also the first Speaker of the United States House of Representatives, including for the First Congress (1789–1791) and Third Congress (1793–1795). He did not seek renomination in 1796.

In 1794, during Muhlenberg's second tenure as Speaker, the House voted 42-41 against a proposal to translate some of the laws into German. Muhlenberg, who himself abstained from the vote, commented later, "the faster the Germans become Americans, the better it will be."[1]

http://en.wikipedia.org/wiki/Frederick_Muhlenberg

Mon, 05/30/2011 - 12:13 | 1322612 Orly
Orly's picture

I stand corrected...with a caveat.

If there were no official language and the translation and documentation of US law into German was as close as we got to it, then I would say that we still came pretty close to having German as our official language.

"the faster the Germans become Americans, the better it will be."

I wish I knew in what context he made this remark.  If he meant by language, then it is clear that the entire world became Americans because it is obvious that American English is by far the most common language in the world.

If he meant that they become a peace-loving agrarian nation, then he was wrong by 180 degrees.

:D

Mon, 05/30/2011 - 22:48 | 1324262 StychoKiller
StychoKiller's picture

More people in the World speak Chinese than English, but English is the language of choice for commerce.

Wed, 06/01/2011 - 06:00 | 1327845 Land of the Ris...
Land of the Rising Sun's picture

You know that there are more Chinese speaking English than there are Americans speaking Chinese?  ;-)  Not just in percentage terms, in plain numbers dude!  

http://www.webmasterworld.com/forum32/323.htm

Mon, 05/30/2011 - 13:34 | 1322714 merehuman
merehuman's picture

dear Orly, many organize their home, shoes or time, but few organize their attention. personally i live close to my heart but keep my attention in the present moment via focusing at least 30 % of my attention at the inner eye. beats hell out of being scattered. In the past, having employees i notice after lunch their bodies are still on the job, but the mind/thought are already at home or at the bar. Its the same with travelers mentally already there, thinking about THERE and all the while failng to be fully here. Attention and its focus, as well as our imagination powers are steadily being used and warred against by media, advertisements etc. Seems they all want our ATTENTION while we personally do often not claim it, control it or exercise it. The being that we really are is using the body and mind as the anchor to be in this material illusiory world.  Failing to use it properly one becomes..merely human. we are not the suit we wear,nor the body but that is forgotten by many and the cause of the disconnect.

I do not care for many outercovers of the beings we share this planet with, but recognize all that lives as family.

 

Mon, 05/30/2011 - 13:54 | 1322811 Orly
Orly's picture

Thanks for that.  Toward what I was asking ORI about, it is very difficult to be "one's-self" when there are so many selves I must be during the day. When I am open and uncompartmentalised, I can see and participate in all that is around me but the extra freedom of mind is very taxing because I have to coniously stay in that mode.

One would think that it would be the opposite; that if one were to be one person always, then that would save energy of "shifting" out of personae and so would be easier.  I have found the opposite to be true in that my attention must be given to a certain task and for that task, I wear a particular hat.  It is easier to don the hat than it is to re-learn the task in my "open" self.

I think most people are this way and that is why they are already in the bar after lunch.  They can only wear the hat for so long before it becomes wearying.  Humans have a need to shift quite frequently but, at the same time, they also have a need to stay in the mode for that given period.

To be all things to everyone always is a sure way to get beaten down.

___________

"Attention and its focus, as well as our imagination powers are steadily being used and warred against by media, advertisements etc. Seems they all want our ATTENTION while we personally do often not claim it, control it or exercise it."

For this reason, I mostly disagree with Cognitive Dissonance's posts.  People aren't as susceptible to mass media and brainwashing as he presumes.  Most people couldn't care less and that is because they already have too many hats to wear and their compartmentalisation doesn't allow for them to take on any more information.  The rest is seen as noise.

I would suppose he could easily argue that there is some subliminality to the whole thing and that that's how they get you.  I would contend that people don't care about that crap and it is pure noise to them, with almost no effect whatsoever on their attitudes.

None of this really matters until it does.

:D

Mon, 05/30/2011 - 18:00 | 1323236 merehuman
merehuman's picture

Orly, You are correct re many hats is better, worst is to be stuck in under just one and that seems true for so many , mostly men. I am a male and still learning sensitivity and flow. Glad you are getting some responses, because i think the work we all must do on ourselves is more important than the work we do to keep our suits. HAVE A BETTER DAY.

Mon, 05/30/2011 - 17:01 | 1323164 Newsboy
Newsboy's picture

Hi Orly,

It remains tiring, but sometimes that same openness is also there to recharge you. It is honesty, and honesty makes you see the world more clearly, as well as showing yourself more clearly. I advocate it. Taking this kind of spiritual high ground tends to make all your shit come to the surface. that lets you deal with it, but it can be a tiring decade or so. That's what we're in for anyway.

Wishing you the best success.

Mon, 05/30/2011 - 09:31 | 1322241 mess nonster
mess nonster's picture

NO dollar kaput. Aug 15 will come and go, no rapture, you don't get to pass go, and your 200 bucks will still be the official reserve currency, with which you'll just about be able to fill up the tank on your monster deisel pickup truck.

No big ECB move- at best, Greece will make some concessions in sovreignity... DSK was taken out for all these reasons. A Greek default is assured... no more SDRs (think Libya... if you want a Philosopher's stone to figure out why NATO is blowing the living shit out of that country, just say "SDR's".)

The winner? The dollar bill. The loser? Everybody who doesn't sit in a boardroom of Goldman Sachs, JP Morgan or the US Fed. The why? Better brush up on your understanding of esoteric symbolism...

Of course, you're right about Spain and Portugal. There will be collateral damage... do't take it personally, it's just business...And all of it is just a juggling act, with flaming swords and razor-sharp ninja star now tossed into the mix.

Mon, 05/30/2011 - 11:13 | 1322443 ElvisDog
ElvisDog's picture

I agree. The system has a remarkable ability to carry on. Someday it won't be able to, but I wouldn't want to bet on Aug 15 as the day of destiny.

As for DSK, I now think he was only "taken out" in the sense that his bad behavior wasn't papered over, looked the other way this time. I'm quite sure he did everything he is accused of doing. It must have come as quite a shock to him when the police pulled him off that plane. It was probably the ultimate "do you know who I am?" moment.

Mon, 05/30/2011 - 08:41 | 1322176 Gmpx
Gmpx's picture

Why cannot Greece leave EUR and EU and stay outside similar to Switzerland and Norway. Switzerland and Norway are doing well.

Mon, 05/30/2011 - 08:47 | 1322184 hugovanderbubble
hugovanderbubble's picture

Maybe because Norway is completly different to greece financial culture.

Norway has tech, good financial culture, prolly the best european Sovereign Wealth Fund, Resources (Rich in oil lands)

100% uncomparable

 

Greece is a default country and haircuts will be awesome yes or yes. So dilution is whole European banks is 100% sure. (all this about DSK is one more smokescreen to earn some time and take a brighter pic about TragYcomedY STressTest in Banks....all ECB big heads should be prosecuted)

Mon, 05/30/2011 - 09:04 | 1322208 Gmpx
Gmpx's picture

I do not think that Norway is completely different. Greece simply needs its own currency and its own rules. The currency would devalue. The rules would allow independent trade with countries outside the EU - similar to Switzerland. Greece history, food, nature make it such a nice country, very open and very human. Greece cannot be bankrupt without "help" from outside. You cannot bankrupt people eating the food they grow under the sun.

Mon, 05/30/2011 - 09:53 | 1322275 lubyanka
lubyanka's picture

LOL you're funny. Look at the CDS spreads of Norway, Switzerland and Greece. (And the US, if you're so inclined)

Switzerland and Norway are extremely wealthy, which is one of the reasons why they didn't join the EU. It's not that they are extremely wealthy because they didn't join. Chicken vs. egg debate here

Mon, 05/30/2011 - 09:53 | 1322271 Raymond Reason
Raymond Reason's picture

I think it's because Greek debt is denominated in Euros, so they can't monetize with drachmas. 

Mon, 05/30/2011 - 09:11 | 1322178 spanish inquisition
spanish inquisition's picture

Greece, Fuck austerity. Go Icelandic Viking on their EU asses.

EDIT: Better yet, head to the Parthenon and beseech Athena

Mon, 05/30/2011 - 10:31 | 1322328 trav7777
trav7777's picture

drachma goes to 0 then.

currencies are "backed" by debt, including sovereign.  When that debt shows as unpayable and defaulted, it's the same as if you backed a currency with gold in a vault and the vault was empty.

Mon, 05/30/2011 - 10:32 | 1322339 spanish inquisition
spanish inquisition's picture

Whoa... Guess that is why we are not auditing Fort Knox....

Mon, 05/30/2011 - 08:46 | 1322179 Fox-Scully
Fox-Scully's picture

Time to default and start the domino effect!

Mon, 05/30/2011 - 09:30 | 1322245 mess nonster
mess nonster's picture

I love dominoes!

Mon, 05/30/2011 - 09:39 | 1322253 mess nonster
mess nonster's picture

I love dominoes!

Mon, 05/30/2011 - 08:51 | 1322185 argentinian ser...
argentinian serial defaulter's picture

it's all a joke,they can't repay.

It's amazing how anyone lent money to this people at german rates.

Greece and spain will repay with olives!!!

Mon, 05/30/2011 - 08:56 | 1322199 hugovanderbubble
hugovanderbubble's picture

we could sell Balearic Islands in order to swap our Debt with Germany..._)

 

Mon, 05/30/2011 - 10:38 | 1322355 Rodent Freikorps
Rodent Freikorps's picture

Would you consider splitting them up?

I only want Ibiza.

Mon, 05/30/2011 - 11:18 | 1322450 ElvisDog
ElvisDog's picture

That's the part I don't get. If they can't pay their current debt load, how will they pay an even larger debt load. It seems that the ECB/IMF think that (A) the Greek economy will stage a miraculous recovery if given a little more time (B) the benefit of kicking the can down the road one last time is more than the risk of a bigger default in the future or (C) they really think they can usury the Greeks into turning over ownership of their entire country.

Mon, 05/30/2011 - 12:45 | 1322675 HellFish
HellFish's picture

I'll take C.

Mon, 05/30/2011 - 12:58 | 1322711 Things that go bump
Things that go bump's picture

Well, at least you can eat olives.

Mon, 05/30/2011 - 08:51 | 1322189 Smiddywesson
Smiddywesson's picture

For us to go on a gold standard, central banks have to keep slowly acquiring gold.  Then gold has to rise in price high enough to offset all soverign debt.  That is going to take some time.  I agree, they will sacrafice some countries along the way and then make a stand, probably with Spain.  When that stand breaks, there will panic everywhere, gold will ramp in the last panicked buying, and the central bankers will step in to "save the day."  The Pope will make Bernanke an honorary Catholic, and he will be cannonized for the miracle of making the debt disappear, along with our bank accounts.

Mon, 05/30/2011 - 08:53 | 1322194 theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

What are all these southern europens going to do, really? All go to London or Berlin and work as waiters?

The domino effects and haircuts will be felt by the whole of europe, thats for sure.

Mon, 05/30/2011 - 09:27 | 1322239 Urban Redneck
Urban Redneck's picture

... Or move to Germany and collect unemployment benefits from the German taxpayer ...

That is precisely why Greece would probably be forced to exit the EU and not just the euro zone.

Mon, 05/30/2011 - 10:18 | 1322309 theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

Yes. This just can't happen. Sure all accross europe there are migrants from all over the world that somehow go to the front of the list for free housing, that reproduce while native populations stagnate, that don't work etc etc...yet adding to the dependents at a time like this is just, in effect, further money printing that will hasten the decline of the currency.

The irony is we've accepted these people from all over the world, when we'd actaully prefer other western europeans.

 

This leaves us with the question: if emmigration is not the answer...what are these people going to do!! 30-40% unemployment can't last without revolution. Thats why these people on the streets aren't going away, just like they didn't in egypt.

Mon, 05/30/2011 - 09:03 | 1322203 Lord Welligton
Lord Welligton's picture

"The Eurogroup is doing research for reprofiling -- what can you do on reprofiling? Is it possible without a credit event?"

 

Which seems to be what it's all about.

One such credit event could be the touch-paper that sparks a derivative meltdown.

 

 

Mon, 05/30/2011 - 09:43 | 1322261 mess nonster
mess nonster's picture

In 1345, English King Edward III defaulted on his debts to key Venetian and Florentine banks... the result? Just the Black Plague and 200 years of Dark Ages.

Bring on the deflationary hyperinflation tsunami,  bitchez!

Mon, 05/30/2011 - 10:34 | 1322332 trav7777
trav7777's picture

deflationists misunderstand "fiat" currencies backed by debt.

When the debts default, it makes the paper backed by them worthless not more worthful. 

King Edward did not cause the Black Plague, dude.

Declining credit is deflation...systemic and sudden default (which is INEVITABLY reached at some point in the deflation cycle) is the hyperinflation.

Mon, 05/30/2011 - 12:55 | 1322694 Orly
Orly's picture

"King Edward did not cause the Black Plague, dude."

I know, right?  I thought some of my stuff was out there...

 

Mon, 05/30/2011 - 09:11 | 1322216 Madcow
Madcow's picture

You’ve got to hand it to the IMF / EU / FED / Etc –  They’ve created unified global opposition to Government in a few short years. Before, there was seething unrest, but most people did not quite understand who the villains were or what there motives were.  Now people can see clearly that the problem is the bankers and their control over politics.

 

Mon, 05/30/2011 - 09:26 | 1322237 lizzy36
lizzy36's picture

The question is how long to the entrenched interests of the banking and political classes prevail over the interests of the general population.

Bailouts prevent reforms (see how TBTF worked).Consequences interrupted.  The status quo is NOT going to give up their their advantages and privileges, without a fight.

Mon, 05/30/2011 - 10:03 | 1322297 Madcow
Madcow's picture

The bankers will maintain their fantastic delusions until it becomes clear that the supply chains that bring food to market in the big cities has broken down.

A fiat system can’t work outside a context of growth and private (voluntary) credit expansion. Without expansion, there’s simply no new cash to feed all the previously issued bonds and rents – and the system crashes.

‘Government’ borrowing just makes things worse by increasing future implied taxation, which adds deflationary pressures and expectations to the economy.  The central bankers can’t possibly restore growth – all they can do is create inflation by debasing the money supply.

So here’s the fork in the road – to the right (deflation, austerity), producers of food will not be able to finance working capital. To the left (inflation, currency debasement), producers of food will realize they’re better off just keeping their produce and bartering for trade.

Either way, foods that find their way to grocery stores in London, NY, etc will disappear.  That’s when the game ends.

Mon, 05/30/2011 - 10:33 | 1322340 trav7777
trav7777's picture

not what happened in Argentina.

The vestiges of the political system preserved the cities because that is where the voters are.  Even in systemic bankruptcy and State default, there are still cards to play.  Never forget that.

Mon, 05/30/2011 - 10:20 | 1322310 theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

and the bankers won't let the population lynch them without relocating to asia with sacks full of gold

Mon, 05/30/2011 - 10:22 | 1322316 scatterbrains
scatterbrains's picture

Here in the States they switched to electronic ballets to avoid any concerns about the people trying to take back their country.

Mon, 05/30/2011 - 11:37 | 1322487 Smiddywesson
Smiddywesson's picture

"The question is how long to the entrenched interests of the banking and political classes prevail over the interests of the general population."

Oh I don't know, how about, um...forever?

Bankers are an implacable foe that just keep coming.  Sure, they have reached diminishing returns and their cycle is about to crash, or maybe they pull a stick save with a gold standard, but even if they bring about global warfare and crash the system that they reign over, they will always be the top crab in the bucket.

Mon, 05/30/2011 - 09:59 | 1322285 Raymond Reason
Raymond Reason's picture

This could create another epic backlash for Jews in general.  Which is a tragedy for the majority. 

Mon, 05/30/2011 - 10:34 | 1322344 trav7777
trav7777's picture

the majority has been silent about the machinations of the minority.

Mon, 05/30/2011 - 13:08 | 1322730 merehuman
merehuman's picture

How to get rid of bankers for dummies", needs to be written soon.

Mon, 05/30/2011 - 09:09 | 1322221 Bleeping Fed
Bleeping Fed's picture

Major euro pairings are surprisingly stable at the moment.

Mon, 05/30/2011 - 09:17 | 1322226 Orly
Orly's picture

They may be reversing here.  Watch the EURUSD over the next twenty-four hours.  A slow move toward 1.412 seems to be in order.

:D

Mon, 05/30/2011 - 12:39 | 1322672 falak pema
falak pema's picture

how do you calculate to third decimal? is this a secret recipe?

Mon, 05/30/2011 - 13:04 | 1322721 Orly
Orly's picture

Mon gastronome!  Toujours avec des recipes, eh?

When the Gartley pattern emerges in MT4, the axis upon which it rests becomes the target line, which is given to five decimals.  Actually, the downside target for EURUSD is 1.41191...but that's a bit of overkill.

/:

 

P.S.  What is your favourite French dish for chicken breast?

Mon, 05/30/2011 - 15:38 | 1323050 falak pema
falak pema's picture

My other half makes a chicken dish with lemon sauce that is do light and tasty I could drink a bottle of red wine on my own, but I don't, seeing she likes it too! Then, we get into more serious stuff; which involves chicken pieces cooked with tomatoes and coriander, with garlic and ginger..lots of coriander! A treat of oriental origins so mystical I am enthralled; lost for spicy words  but not lost for appetite! ...Le 'poulet au citron' is a classic, lightly cooked  wonder! She serves it with Basmati rice. For the other you will have to give me more than a virtual kiss...more a recipe for mortal bliss! Amen and bon appetite...BTW I'm lost in translation on the Gartley MT4 front...it sounds like a dicy axis of logically dressed market madness... like a 'head and shoulders shampoo' on the derivatives market...I'll stick to soap and water...more my line..

Mon, 05/30/2011 - 09:16 | 1322225 bill40
bill40's picture

Just a quick question, fiat currency seems to be tanking in both the US and Europe. is anyone actually doing something about it aside from hitting the F5 button on the printing press?

Mon, 05/30/2011 - 09:21 | 1322229 lizzy36
lizzy36's picture

No.

In fact there is a race to devalue currency on both sides. The first to hit the bottom, wins a Greek Island.

Mon, 05/30/2011 - 10:21 | 1322313 theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

....no!

Mon, 05/30/2011 - 09:30 | 1322231 THE DORK OF CORK
THE DORK OF CORK's picture

Those professional hitmen over there in Frankfurt are Muppets

www.youtube.com/watch?v=mSvJwUFI_es

 

Mon, 05/30/2011 - 09:42 | 1322258 aheady
Mon, 05/30/2011 - 09:33 | 1322244 Urban Redneck
Urban Redneck's picture

 

Perhaps Samaras should have telephoned ILD in Lima and come up with plan for integrating the black economy before proposing tax cuts - or at least brought in someone who the EU & IMF respect to represent the Greek side.

 

Mon, 05/30/2011 - 09:33 | 1322248 johngaltfla
johngaltfla's picture

When Greece reverts back to its own currency and sovereign rule, the banking system implodes in Northern Europe and that takes Wall Street down with it.

Mon, 05/30/2011 - 10:50 | 1322322 Widowmaker
Widowmaker's picture

No way, fraud street will be burnt to the ground by US citizenry who have been pillaged, stolen from, and punished through no fault of their own (including the unborn).  Your comment makes you sound like Hank Paulson - Pity.

Lady Justice is a bitch, and Europe won't get the pleasure.

What happens if the Euro collapses??  Price discovery - decades overdue.

Mon, 05/30/2011 - 10:15 | 1322249 Widowmaker
Widowmaker's picture

Let me sum up the problem of globalization - "THE RENT IS TOO DAMN HIGH!"

It is not just taxing and spending, it's old fashioned [now] global monopolies distorting prices (spending) at the individual, all the way to the sovereign level.  

Thank fraud, banks, speculators and political pincushions for being so spineless and throwing the masses under the bus for personal gain.

My brother was an energy trader for 26 years -- take oil for example, all the way back to the 1990's the price of a barrel of oil was inflated well over 40% because of pure speculation.  Ripping people off at the pump contributes to the deficit trap on an aggregate level.   It's not just oil, it's about damn near everything except cheap labor and technology.  EVERYTHING ELSE is distorted and manipulated.  There is no free market (true price discovey), and that is the problem! ANYONE talking about supply and demand is a liar and a thief - ANYONE.

The US exports inflation based on bullshit speculative price distortions for 40 years, and it shall be returning shortly, with interest.

Ask yourself, why are Shittygroup and Government Sachs too big to fail, but national sovereignty is not?   Greece, tell the banks to go shove their TBTF bonuses up their asses and burn their buildings to ashes - they have earned it.  

Dump the Euro, tell the fiat fraud syndicate to fuck off and take back your dignity!

Mon, 05/30/2011 - 10:26 | 1322321 theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

as much as I despise maggie thatcher and enjoy seeing her now suffering from dementia, she did say something rather wise, which james turk just quoted..."the problem with socialism is that eventually you run out of other peoples money"

Mon, 05/30/2011 - 09:39 | 1322251 keating
keating's picture

Hmmm...Iceland, doing just fine. Greek business will get all the money they need from China and other Asian banks.

European banks will look to US to backstop them, and Timmy G will provide a hidden new way to print money under the leaves...

Mon, 05/30/2011 - 09:37 | 1322254 The Axe
The Axe's picture

The EURO acts extremely strong!!  For a union with 3 bankrupt members..

Mon, 05/30/2011 - 09:51 | 1322272 Racer
Racer's picture

Maybe because it 'only' has 3 bankrupt members, unlike the US which is completely bankrupt!

Mon, 05/30/2011 - 10:18 | 1322312 Dick Darlington
Dick Darlington's picture

These headlines from the european central banking cartel. Seems that there's no faith left even within the cartel itself.

05-30 09:44: Belgian central bank faces loss of about EUR 200mln on sovereign bonds according to Belgian central bank director 05-30 09:49: Belgian central bank says stopped buying some bonds on ECB action
Mon, 05/30/2011 - 10:34 | 1322333 Tyler Durden
Tyler Durden's picture

200 million?

Mon, 05/30/2011 - 11:32 | 1322482 Dick Darlington
Dick Darlington's picture

If national CB's have been buying according to the capital keys we get roughly the following assuming the total amount bought by "ECB" is 75 billion: Belgiums share would be roughly 1,8 bn (capital key for Belgium is 2,4256%). They say the loss is 200 million which indicates lossrate of roughly 11%. Judging this against the fact that most of these purchases are Greek bonds and the buying started long long time ago, losses of 11% seems quite optimistic to me. But hey, there's supposed to be a can full of gold at the end of the rainbow so why not mark the book at least half way there. ;-)

Mon, 05/30/2011 - 12:48 | 1322690 Fazzie
Fazzie's picture

 lol,  Yeah, the Austin Powers movie scene with a behind the times DR Evil demanding a laughable ransom comes to mind.

 Modern Bankers probably just consider anything denominated with just six zeros as a rounding error.

Mon, 05/30/2011 - 10:41 | 1322359 Iceobar
Iceobar's picture

So with the Greek IMF tranche due June 29th, QE2 ending June 30th and a solar eclipse on July 1st....does that mean it'll be "lights out"??....Just asking.....;>)

Mon, 05/30/2011 - 12:08 | 1322594 P-K4
P-K4's picture

No one will collect on CDS from sovereign debt defaulting. The instruments exist much like gold and silver paper EFT's (i.e. yielding a perception of security).

"....the principle of CDS needs to be kept alive at all cost: financial institutions across the globe are buried so deeply in the stuff that they would all die instant deaths if they were taken away, or even their value or worth just doubted. CDS serve to hide debt, and the world's financials can't afford for their debts to be exposed. Nor can central banks or governments, for that matter."  - from Automatic Earth

 

Thanks to financial illusionists, we created a banking casino that has a nuclear option.

Mon, 05/30/2011 - 12:50 | 1322686 Renfield
Renfield's picture

"the world's financials can't afford for their debts to be exposed. Nor can central banks or governments, for that matter."

Since, my friend, you have revealed your deepest fear, I sentence you to be exposed before your peers. Tear down the wall!

Mon, 05/30/2011 - 14:01 | 1322809 jmc8888
jmc8888's picture

We have a winner.

Glass-Steagall (because again, the shit as mentioned above are bullshit and unpayable instruments....but hey they sure can squeeze bailouts from this shit)

Banksters cry to countries they need to be bailed out on this crap (mers included), and yet in reality, they are failed instruments of monetary sophistry.

So far the banksters have been better than Billy Mays touting their 'CDS' among all their other crap, and gov'ts have been ringing the phones off the hook trying to get what they always (never) needed.  We gotta buy this shit says every country enacting a bailout of crap.

Glass-Steagall makes this shit worthless, which in reality, is what it is worth.  But we can continue to believe dogshit is caviar.

Don't be left holding the bag of 'paper' bullshit.  Mers mortgage like Silver ETF's, CDS, etc, etc is just paper.  They are only payable as long as someone is bailing it out.

Mon, 05/30/2011 - 13:02 | 1322716 falak pema
falak pema's picture

There is a eureka solution to this crisis : Find a gold mine and silver mountain in the Meteores; in every greek mountain there is a silver lining and in every greek lake a golden bottom. Now when you dive deep in the Aegean sea you find a paradise of pearl oysters. If you add the sponges in Kalymnos you can suck in all the oil of the Sauds into their lattices. Now you know why the greeks don't care about Merkels the only care about gherkins that they eat with their tarama salads. When you have the mediterranean summer you don't give a shit about european winter. Remember, since Zeus's days they always thought Europa was a cow with the face of a Deutsch gross mädchen. That belonged to the greek god...of thunder.

Mon, 05/30/2011 - 15:05 | 1322985 malek
malek's picture

European Commission spokesman Amadeu Altafaj dismissed the report as "unfounded rumours, once again."
I hope he said that with a smirk.

TD: I thought it's not SMILE but SLiME? (Souvereign Liability Management Exercise)

Confused... ;-)

Mon, 05/30/2011 - 15:32 | 1323036 ivana
ivana's picture

meetings, meetings blah blah blah while behind curtains

http://www.youtube.com/watch?v=945OR2MkRDs&feature=related

... and few months later we will see the end whenmaster will decide who gets what

http://www.youtube.com/watch?v=CxO1MCBfLtw&NR=1

Mon, 05/30/2011 - 22:43 | 1324217 joiceca
joiceca's picture

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Mon, 05/30/2011 - 23:02 | 1324323 Buck Johnson
Buck Johnson's picture

The deal will be, the US will give the money in secret to the IMF to lend to Greece.  But the IMF has to pick who the US wants to head the IMF.  It's so funny that the head of the IMF got the case of attempt rape of that woman hmmmm?  I'm not saying he didn't do something, but everything seem to fall into place.

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